More Economists Call For Political Reform

A group of government economists are arguing that Russia needs to fundamentally alter its political system in order to modernize its economy.

The daily "Nezavisimaya gazeta" is reporting that a revised version of Strategy 2020, the Kremlin's development plan for the coming decade, argues that "without the radical reform, the gap between Russia and the advanced countries and emerging markets will continue to widen."

The authors include Vladimir Mau of the Russian Academy of Economics and Civil Service, Yevsei Gurvich of the Economic Experts Group, and Yevgeny Yasin of the Supreme School of Economics.

Economically, the group argued for budgetary discipline, the fostering of true competition, severing the close ties between government and business, and allowing weak enterprises to fail, regardless of their political connections:

The designers of the new strategy are convinced that Russian businesses ought to be freed from corruption and the pressure to pay off the security services and the bureaucracy. The authorities should focus on establishing a broad class of owners and dramatically altering their own attitude regarding business. In fact, the state ought to introduce the practice of compensating businesses when state functionaries fail to perform their duties.

But for this to happen, the authors argue that wholesale political changes are necessary:

Strategy'2020 writers drew a direct connection between the success of economic modernization and political reform. These latter ought to include free and fair elections, political competition, and a genuine, rather than declaratory, separation of powers. The economists said no modernization was possible and it was not possible to tackle the strategic tasks the county was facing without these changes....

The economists in question cannot help knowing that the reforms they are suggesting would essentially dismantle the model that has been in effect in Russia since around 2000. And yet, the alternative to such reforms is the degradation of the economy. This compelled them to call a spade a spade.

The Strategy 2020 economists' call for political reform followed a similar appeal by Finance Minister Aleksei Kudrin. That, however, drew an angry response from the ruling United Russia party, which would have much to lose from political reform.

It will be worth keeping an eye on what kind of elite reception the Strategy 2020 recommendations receive.

-- Brian Whitmore

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The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It offers Brian's personal take on emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power VerticalFacebookpage or Follow @PowerVertical